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Resource type: Glossary Item

Status:
Maintained

Jurisdictions:
England, Wales

An arrangement under which all or part of the purchase price on the sale and purchase of a business, or the shares in a company, is calculated by reference to the future performance of the business or company being purchased. Commonly used as a management incentive where owner-managed businesses are sold and the managers continue to work in the business for an agreed period following the sale.